Consumer advocates rally outside Blue Shield HQ

February 1, 2011 7:04:22 PM PST
On Tuesday, Blue Shield announced it is postponing raising health insurance rates up to 59 percent, but only for 60 days. The announcement came just minutes before 250 protestors gathered outside the company's corporate headquarters in San Francisco.

The decision by Blue Shield means four of California's health insurers have agreed to postpone their rate increases for 60 days. Blue Shield's rate hike is by far the largest.

Nurses, patients and consumer advocates converged on Blue Shield headquarters in San Francisco demanding a stop to the insurer's big rate hike. A small business owner and patient was among those who addressed the crowd. She says her family of three will have to go without insurance, rather than pay the higher premiums.

"The amount we are paying and we've been paying, we're thinking we just put that in a saving account and we save it when a condition arises. And we'll pay out of pocket and throw our chances to the wind. See what happens," says Kerry Abukhalaf, a mother of one child.

Last week, three of California's biggest insurers agreed to postpone their rate hikes 60 days. Pacific Care and Anthem agreed to postpone rate hikes between 2 and 9 percent. And Aetna postponed its increase of 20.7 percent. Blue Shield was the last holdout. The sudden reversal caught the protestors by surprise.

"It's a victory in a very large war," says Rose Ann DeMoro, executive director of the California Nurses Association.

Blue Shield declined an on camera interview, but in a statement, said, "We are taking this action to remove any doubt that the rates we have submitted are necessary to pay the medical expenses of our individual members. Even with these increases, we don't expect to cover the cost of medical care for these members."

That was met with skepticism by the California Nurses Association.

"The cynical thing about this is that Blue Shield actually supports Obama Care and then turned around and raised their rates 59 percent because that's the loop hole," says DeMoro.

The president of Consumer Watchdog, Jamie Court, says ultimately C alifornia's insurance commissioner needs more power.

"We need an elected insurance commissioner who will have the power to tell them to wait. They weren't going to wait until the nurses showed up and the patients showed up," says Court.

The alternative for some is to go without.

"The high cost of our health insurance is supposedly promising us peace of mind and it's not worth that peace of mind. So I rather take the risk than stress of the high cost," says Abukhalaf.

Assembly Bill 52 would give the insurance commissioner greater power to reject rate increases. Look for that to be a major battle in the legislature later this year.